HSBC, JPMorgan top global banks capital surcharge list

Huw Jones

3 Min Read

LONDON (Reuters) - JP Morgan (JPM.N) and HSBC (HSBA.L) topped the list of the world’s top 29 banks that must hold extra capital from 2016 because of their size and reach, the Financial Stability Board (FSB) said on Monday.

The FSB is the regulatory taskforce for the 20 biggest economies, whose leaders agreed in 2011 on extra capital requirements to keep top lenders stable in rocky markets.

The aim is to shield taxpayers from having to bail out banks as they did in the 2007-2009 financial crisis.

The extra capital requirements range from 1 to 3.5 percent spread over five “buckets”, with full compliance by 2019. They come on top of the 7 percent minimum capital holdings all banks across the world must have by 2019.

The FSB was publishing an annual update of its list of globally systemic banks with still no bank occupying the top “bucket” with a 3.5 percent extra capital buffer requirement.

Many banks on the list already comply or exceed its total capital requirements due to supervisory and market pressures.

A second Chinese bank, Industrial and Commercial Bank of China (ICBC), has been added to the list, increasing the number of big banks by one to 29 compared with last year’s update. ICBC is the world’s biggest bank by market capitalization.

Next year’s list from the FSB in November will determine which banks will actually have to comply with the new surcharge rule from 2016.

Under the latest list, HSBC and JPMorgan would have to hold an extra 2.5 percent of risk-weighted core capital.

Barclays, BNP Paribas, Citigroup and Deutsche Bank have been placed into the 2 percent surcharge bucket - the latter two dropping from the 2.5 percent band.